The Infinite Dial

HD Radio has so far failed to gain the traction that the radio industry had hoped for, leading to a lot of questions about the future success of the platform. Both Sean Ross and Larry Rosin have offered up some good ideas for HD in this space, so I'd like to take up the gauntlet and humbly offer a few more, and perhaps a different way of thinking about the problem.

First of all, let's begin with a simple declaration--there will be digital radio in the future, and nearly everyone will have it. After all, while HD Radio has been a favorite whipping boy for a lot of pundits, I don't think anyone can argue with the simple assertion that radio cannot remain the last analog holdout amongst major media channels--there will be digital radio of some form, and (eventually) it will simply be the way radio is delivered (and all radios manufactured), with no decision-making required on the part of the customer.

Unfortunately, Radio's current digital solution is a closed model, not an open source model--which is rarely favorable as a mass-market business model for hardware. Ask the folks at Toshiba about HD-DVD (and ask the folks at Sony--who should not be gloating about Blu-Ray--about Betamax, the ATRAC format, and my poor, lamented MiniDisc player.) It will only be when everyone can make an HD radio, that everyone will make an HD radio--that's technology adoption 101. Still, HD is the hand we are dealt, so we can either fold or play the cards as best we can--which is what I propose here.

Since we in and around the radio industry are not in the business of selling radios, we shouldn't get too exercised about how the hardware is marketed. What we can focus on is great programming, and like Larry Rosin, I believe HD's best shot in the short term is with national brands. Beyond that, however, it is vital that we also focus on what the business model for HD Radio programming can become (and not the business model for selling radios) because as I posted earlier here, when what you are selling is available for free, you'd best focus on selling something else that isn't.

To date, HD's programming efforts have been focused on music offerings, and many of those geared to non-mass appeal audiences; either younger listeners with new music-only channels, or more adventurous takes on alternative, dance and even classic country. Most of these efforts spring from one of three central propositions: HD radio solves a "music/sound quality" problem, a "music variety" problem, or HD solves the "youth" problem. The first is easily dispensed with. There are only so many "audiophiles" out there, and if anything the continuing encroachment of low bit rate digital music file purchases (and how this has impacted the way recordings are engineered) into the space formerly occupied by "pristine" CD files points to the "quality" issue as a non-starter with Joe Six-Pack. But what about the "variety" or "youth" propositions?

None of these music-focused offerings are designed to provide HD Radio with its best chance for rapid, mass adoption, but are instead focused on solving some "problem" with broadcast radio. In other words, we are asking consumers to purchase and use a product or service that does the same thing, only a little better, as the thing they get now for for free--instead of a service that gives them something they cannot currently get. The former is a recipe for marginal or incremental gains, while the latter paves the way for potential paradigm-busting success. What I would suggest here is that we are asking people to purchase and consume something new, so let's give them something new and/or previously unavailable as an incentive.

Now, there is nothing wrong with trying to increase our variety perception, or attracting more young people to radio--it's just that using an unknown quantity like HD is simply too many balls in the air to effectively address these issues. Let's take the "youth" issue. I can certainly understand the rationale of the consultants and programmers who posit that HD channels might be a compelling reason for younger listeners to return to radio, and are thus using HD channels as a means to attack radio's precipitous declines with 12-24 year olds. There are two real problems with this model. The first is with the sustainability of the business model. To a 12-24 year old, music is available for free. Even if these channels could gain any traction with younger demos, as soon as radio starts to play around with ways to monetize these young-leaning music streams, they'll become Napster Version One-style ghost towns overnight.

The other problem is more of a math problem. To date, we have shown no signs of being able to solve the problem of declining 12-24 numbers, which will soon manifest as 12-29 and 12-34 numbers. That's neither pessimistic nor optimistic--it's math. If our solution to the "youth problem" is meant to solve for the "HD problem," that's too many variables. We are solving for x=y without knowing x or y, which your ninth grader will tell you is impossible. My wife the scientist tells me that you can only solve for one variable in an experiment when you can control for the others. To solve for y, then, you need to be able to solve x. Throwing a bunch of younger leaning music streams out there is asking for a behavior change along two axes (come back to radio AND buy an HD)--that's too many variables, and that just never works in marketing.

So, my "groundbreaking" idea is to simply focus on the best solution for HD, and let's leave radio's other problems for other experiments. I am a big fan of TLC's "What Not To Wear," where style consultants Clinton Kelly and Stacy London attempt to salvage train wreck wardrobes and get their unsuspecting fashion victims to dress better and recognize their strengths and weaknesses. One of the most common themes of the show is the 30-something female who, believing that she will eventually lose weight, continues to dress in the sizes she wore in high school or college. Clinton and Stacy's sage advice is always the same--"you dress for the body you have, not the body you want." Radio, the body you have is 30-something and older, not as much into music as they used to be, and yes, gaining some weight. If we want to jump-start HD Radio NOW, let's dress for the body we have.

To that end, music radio may not be the best lever to force HD Radio's adoption, and as noted earlier is an increasingly shaky platform for a sustainable business model, whether ad-supported or subscription, when so much is available for free. That's not to say that there could not and should not be HD music channels (certainly your existing broadcast music station should be available in HD before we go monkeying with side channels), just that our best shot is to provide something new and previously unavailable (yet desirable) if we are going to change an ingrained, habitual behavior. Simplifying the model to create a sustainable, monetized product for 30-64 year old listeners gives us a filter not to think "outside the box," but to think, in a very simple way, inside a much bigger box. With that in mind, here are three very simple ideas such a thought process naturally generates--and I'd love to read some of your constructive thoughts here as well, so do send in your comments.

1. Rebroadcast National TV Audio, with spot replacement. My wife has an XM Radio and though I have continually reminded her that she has never once tuned to 98% of the channels (including, as previously discussed, none of the music channels), it's her ability to hear CNN in bed at night or on the way to work in the morning that compels renewal. I cannot watch TV while I work, but I would certainly have the audio on for CNN, MSNBC or CNBC all day. Splitting the avails between the networks and the stations would be a way for the cable channels to extend their brands, and give you some attractive inventory to sell locally. HD would be providing a genuine, compelling service here using a sustainable ad-supported revenue model that does not require a subscription--truly an attractive, new offering. I expect to get some mail on this one, excoriating this viewpoint as "giving up," or "outsourcing" to TV what we should be doing ourselves. Let's face it--we don't have the resources to do MSNBC locally, so if we are going to do it nationally, why try to build a new brand from scratch? Again, my theme here is rapid adoption of HD Radio by providing the most compelling commercially sustainable offerings possible to the listeners we have. Returning growth to broadcast radio is another topic, another day. Might a suite of TV audio channels cannibalize an existing news/talker in a market? Well, it might force the weaker ones off, yes. Good for radio.
2. What else are 30-64 year old people listening to? Look in your own cars, or ask people at the gym and you will hear another very common answer--audiobooks. If you could get a chapter every day of the new Grisham book delivered with a few ads during drivetime, would you do it? With liberal repeats throughout the day and week to allow people to catch up (which shows like "24" rarely have the luxury of doing) ad-supported audiobooks could be a real win-win for publishers (who are also under intense revenue pressure) and stations. There is gold in the back catalogs of a lot of audiobook publishers, whose current business model depends very heavily on audiobooks of current best-sellers. There could be a very attractive deal to rebroadcast great, older books (not Great Books, I gave that battle up...) that are not generating a ton of sales revenue but could live again as advertising (or sponsorship) supported audio content. Look at what Oprah has been able to do with this same back catalog!
   
   Now, there are certainly some valid objections to this model, including the potentially fallacious presumption that people will tune to the same channel every day for an extended period of time so that they don't miss their place in the "story." I would note two things here: first, the data on listening to multiple-hour shows like Limbaugh and All Things Considered suggests that people will in fact listen for long blocks of time, every day. Thousands and thousands of people bought the last season of Lost on DVD and "power-watched" the whole thing in preparation for this year's season premiere, so let's not overstate the whole "attention span" argument. If we can produce appointment radio, we should. Second, well, maybe it won't work. There's no better time or place to take a flyer, however, than on HD radio, right now. Too many voices out there are focused on preaching why it can't work. What if it does?
3. An HD side-channel also gives radio stations a local option for a potentially lucrative sponsorship model in all-local, all citizen-generated content. This, in a sense, would be a return to the days of small-market, full-service radio--but we let the citizens do the work. By distributing a few mobile digital recorders out there we could record every town council meeting, every important local speech, every local basketball game (with student play-by-play) and every local drama production, and you'll find someone to sponsor all of it. In a market like mine (Raleigh-Durham) no commercial broadcast station would dare broadcast anything smaller than the UNC or Duke basketball games, but a hyper-local HD channel could cover high schools in Chapel Hill, Durham, Burlington, Raleigh and suburbs and sell radios in droves to parents and attractive, cost-effective sponsorships to local businesses that could benefit from a hyper-targeted advertising vehicle. At a time when radio broadcasters are being assaulted on all sides for a lack of localism, a hyper-local side channel could be a modest way to attract one micro-audience at a time and build a high-cume, low TSL sponsorship-driven business model that would also give the radio industry some much-needed PR.

Incidentally, I challenged myself to think outside of my own "box" and see if there wasn't a model that could do all of the things I suggested not doing earlier--i.e., win the youth demo with a music-driven format. So, let's break some rules: The jukebox will never do it, because the ubiquity of social media outlets has trained younger demos to be distrustful of media that they cannot manipulate, alter or otherwise contribute to. Calling a request line is a completely "black box" process--the listener gains no immediate gratification, no evidence that their request made a difference, and no visible sign it was even received. This, with tools like Twitter, Facebook and Last.FM allowing any 12-year old to be an Internet star any time they want. So, my simple/radical idea would be to bring back The Box as a radio model, with a web-based music selection interface that hooks directly into a version of "DJ Select"--in other words, you put up a widget on the site giving listeners a choice between 5 or 6 hot new songs, and when the last song ends, the one with the most votes plays on the air--and the "winning voters" get their comments/dedications scrolled on the site under the player or perhaps even read by a jock on the HD channel. Completely transparent, user-driven music (within some music database parameters) that is trusted because it can be touched.

In the end, however, our best chance to drive rapid HD adoption is to provide our current best customers with the best possible audio we can, wherever it comes from. This is not ceding anything to other media channels; this is Darwinism, pure and simple. I would love to hear a radio show that would beat the pants off of Keith Olbermann, but if I can't, I'd love to hear Keith Olbermann. MSNBC broadcasts radio shows on TV, so why not run the model in reverse? I look forward to your comments, flames and kudos--but my humble suggestion is to solve one problem at a time, and dress for the body you have.